[0001] The present invention relates to a system and method for financial transactions on the Internet.
[0002] When a financial transaction is performed on the Internet, the seller or merchant selects its gateway provider, a merchant account and transaction processing center. The largest gateway provider in the market today is Verisign. The merchant must find a bank to provide an Internet merchant account. Once the merchant account is established, a processing center is contracted with to process the transaction. The processing center can be done through a bank, but can also be done through the gateway provider. Higher merchant service fees are charged for an Internet transaction due to the inability to have card present transactions. Visa rates can range from 2.25% to 14%. Additional charges include processing fees, gateway fees and monthly reporting fees. Purchases are only made via manual entry of a credit card. Manual entry means that the purchaser must keep in their e-Commerce shopping carts, their credit card number, expiration date and mailing address of the credit card. The process center as part of its verification, matches the billing address with the mailing address that the purchaser keys into the e-Commerce shopping cart.
[0003] In the prior art, the merchant can apply on-line for bank accounts. The merchant must search the Internet to find out where they can apply. The application is only for certain US banks.
[0004] Present payment methods include the shopping cart, gateways to processing centers, manual entry of credit cards and merchant services. Current systems that provide for on-line checking today, are not processed as an ACH transaction, but as a regular check in the banking system with the normal clearing process.
[0005] The merchant communicates to the system of the present invention their main corporate bank so the application can be sent to this bank first. If the merchant does not have a banking relationship or they wish the system to include in the quotes the surrounding banks, the system then matches the zip code of the merchant to the closest banks to their Zip code and sends the application to these banks for a quote. This allows smaller banks to offer additional services to their corporate accounts. The merchant can also include national syndicated banks and banks internationally. The merchant at their option can also select an offshore bank. The only requirement of the bank is it be linked to a processing center (Network). If a bank is not in a processing center network then the system of the present invention must enter into a relationship with the bank to either become a discrete bank or place them in a processing center.
[0006] The present invention allows a purchaser to be able to select a form of payment different than the manually entered credit card. It is an object of the present invention to allow a purchaser to choose payments, including, manual entered credit card, card present transaction using outside company proprietary devices (i.e., eConnect, eCashPad), PIN Debit transactions using the same type of card present devices, on-line check, savings account drafts, money market checks, margin security check, on-line credit line pulls, wire transfers, sight drafts, letter's of credit, etc. It is an object of the present invention to treat all forms of payments outside of credit card as an ACH transaction where funds are pulled immediately from the purchaser's account if funds are available.
[0007] It is an object of the present invention to provide a purchaser the ability to interact with a processing center on-line in selecting alternative payment methods if the method chosen by the purchaser does not have available funds.
[0008] It is an object of the present invention to provide a foreign currency exchange during the shopping cart experience if the purchaser has selected an ACH form of payment. The merchant can predefine their home currency in the set up of the shopping cart as part of their e-Commerce site. The purchaser is prompted to provide their home currency as part of the shopping cart experience and the system accesses the clearing bank currency exchange rates and converts the merchant currency into the purchaser currency. The purchaser currency amount is the amount of money that the processing center will use as determining if the proper amount of funds is available to approve the purchase. Banking systems today have the process for currency exchange.
[0009] It is an object of the present invention to provide an encryption process for a transaction. It is an object of the present invention to take a transaction and encrypt it as the purchaser loads the data into the shopping cart payment process. The data is not stored other than on their screen at the time of data entry. The encryption process is only de-encrypted when the transaction reaches the processing center. Therefore, the purchaser is provided the same level of financial security that the current traditional business transaction model provides. Once the transaction reaches the processing center, it is placed in the same bonded secured transaction processing system as other banking transactions today. All international, national and local banking rules and regulations currently followed by the processing centers will be the same for processing payments over the Internet.
[0010] It is an object of the present invention to provide escrow services to purchasers using the ACH payment types. These services protect the purchaser against loss of money and the process of interacting with merchants from around the world to retrieve monies lost due to fraud. It is an object of the present invention that each ACH transaction be placed into an escrow account on behalf of the purchaser and held there until the merchant completes the transaction. Completing the transaction means shipment of the goods and verification of the bill of lading with the carrier or completing the service with the purchaser verifying receipt of such services. Once the transaction is complete the escrow service will electronically match and clear the transaction by moving the funds out of the escrow account into the merchant account. After the period of time has elapsed that the purchaser has selected for escrow, the escrow service provides notification to the purchaser that the time limit of their escrow has ended and allows the purchaser either to extend the escrow or request a refund of their funds. Based upon the purchaser's direction, the system either extends the escrow or refunds the money to the purchaser in the same manner as the purchaser used to pay for the product or service. The purchaser may experience a gain or loss in their own currency with the proper disclosures at the time of the purchase based upon the currency exchange rates at the time of closing their escrow.
[0011] It is an object of the present invention to provide an accounting system that stores all the details of the transactions for retrieval. Anyone who is directly involved with each transaction has the capability under the present invention of obtaining on-line real time reports, print reports or batch files to support their individual system needs. The reporting capabilities can come from each processing center with the data only being accessible by the parties involved with the transaction. (Merchant, Purchaser, Process Center, etc.). All financial payment data (i.e., credit card, bank account, etc.) will only be made available by the processing center to the individual purchaser and to the banks. No one will have access to anyone's financial information.
[0012]
[0013]
[0014]
[0015]
[0016]
[0017]
[0018]
[0019] Referring to
[0020]
[0021] If a user does not use a credit card for payment, the user can then choose to pay via a PIN debit or an ACH transaction
[0022] If the transaction type is an ACH, then the system verifies the ACH information with the bank of the purchaser
[0023] If the ACH transaction is approved, the funds are deposited in an escrow account
[0024] If a purchaser cannot provide correct information or sufficient funds to complete a transaction then all information concerning the transaction is purged from the system
[0025] After step